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Fudge struggles to stem losses

In nearly two years at the helm of Young & Rubicam Brands, Ms. Fudge has not only failed to reinvigorate the flagship global agency, Y&R, but has overseen such hemorrhaging of business that the question must now be whether the shop will bring in new leadership.

The loss last week of two accounts-Ford Motor Co.'s $100 million Jaguar Cars, which had been with Y&R since 2001 and the $100 million Sony Electronics, a client since 1998-comes less than two months after the exit of Computer Associates, which parked its $100 million account at the agency in 2000. In January 2004, the $300 million Burger King account exited. Other major agency clients are either in review (Cadbury Schweppes), at risk (Sears, Roebuck & Co., which is set to merge with K-Mart), or have stopped advertising to consumers (AT&T Corp.).

While she's perceived to have done a good job with some of the other agencies in the Y&R Brands group, Ms. Fudge hasn't managed to differentiate Y&R from its competitors-a problem that troubles the global networks given the myriad options available to clients. Nor has she markedly improved the agency's creative output or its new-business performance.

Given these issues, something has to give. "To me, the question is, what will Martin Sorrell do to fix the company?" said Michael Nathanson, global media analyst, marketing communications, U.S. media, Sanford Bernstein. He anticipates Y&R will be a major focus of conversation when WPP reports 2004 full year results Feb. 25.

`Speak to Ann'

Would that mean removing Ms. Fudge from her role? When asked, "Is Ann's job on the line?" her boss, WPP Group Chief Executive Martin Sorrell, first said, "Speak to Ann," before later saying through a spokesman: "She is doing fine."

Asked for an assessment of her performance and whether she is in danger of losing her job, Ms. Fudge declined to comment.

A Harvard University M.B.A. who built her marketing career at General Mills and Kraft prior to joining WPP in May 2003, Ms. Fudge was a bold hire, having no experience running an agency. Reflecting her client-side roots, soon after her arrival she undertook a massive assessment of the company's operations, and initiated programs to improve internal processes. But some believe she moved too slowly on other issues, such as new business. "She didn't move fast enough in having a long-term plan and vision," said one industry consultant.

Just two weeks ago, she appointed Gord McLean, a 16-year agency veteran, with strong ties to important clients Colgate Palmolive and Chevron Texaco, to be CEO of the agency in North America. "He will do as good a job as anyone," said an executive familiar with the agency. Still, critics say, Ms. Fudge needs a seasoned agency hand at the helm of Y&R Worldwide.

That may be a route considered by WPP: Hire a new chief for Y&R, while allowing Ms. Fudge to continue at the helm of Y&R Brands.